Wednesday, 28 August 2013

When the levy breaks

Cartoon by Matt

There was a discussion today on Radio 4's You and Yours about the late night levy that councils are now permitted to impose upon pubs and clubs that stay open after midnight to help meet the costs of policing and clearing up after the night time economy, as they coyly called it. The charge cannot be selective: it has to be levied on all pubs and clubs in the area of the council concerned. Newcastle intends to introduce the levy in November, Islington next year and around 30 other councils are considering it. The money would be split, with the police getting 70% with no obligation to spend any of that money on policing the night time economy, and the council getting 30%.

The spokesperson from Islington was quite clear that it was the intention to encourage licensees to close at midnight, and he thought it fair that those who wished to stay open later should contribute a small amount towards the clearing up and policing costs. I decided to check how small the amount is: the amount payable is based on rateable value and ranges from £299 to £4440. A Home Office briefing paper about the levy, including the full range of amounts to be charged, is here.

I see several problems with this measure:

Much of the behavioural disorder that happens late at night is caused by pre-loading: drinkers who have bought their alcohol from off licences and supermarkets to drink at home, and who then finish off their drinking in licensed premises. The outlets where they bought their booze are not covered by the levy.

Following on from that, as licensed premises are not the exclusive cause of the problem, this measure cannot constitute a complete solution, which suggests that the aim is to make money from a problem rather than solve it. The fact that most pubs do not cause any mess or disorder at all but are still subject to the levy is evidence that this is a money-raising rather than an enforcement measure.

The levy will apply to all pubs that have a licence after midnight, even if they have never used it - quite a lot of pubs did apply for later licences that they didn't intend to use regularly so that, if they wanted an occasional extension, they didn't have the hassle of having to apply for one. Rather than give up a licence that they had to fight for in the past, they may instead decide to pay the levy and stay open later instead. Law of Unintended Consequences?

Increased costs will inevitably be passed on to the customer.

It is yet another tax on drinking in a country that, despite the ending of the duty escalator, still has one of the highest rates of beer tax in Europe.

Most pubs will not be affected by this measure - I think the only one in Southport would be Lloyds No. 1 - so real ale drinkers probably don't need to be too worried just yet, but I'm worried about the "foot in the door" effect: if taken up widely by cash-strapped councils, the policy will be declared a success. Who can be certain that the time limit might not then be moved from midnight to - say - 11.00pm? It would require no more than a simple adjustment to the Act - fine-tuning they'd call it - to bring most pubs within its scope.